The number of farmers dying by suicide should be measured to “understand the human cost” of the Government’s changes to inheritance tax on agricultural land, the shadow environment secretary has said.
Pensioners, family businesses and farmers are paying the price for Labour’s “economic illiteracy”, Victoria Atkins said, as she urged the Government to commit to “a full and proper review of this dreadful policy”.
Treasury minister James Murray said the Government’s plans to impose 20% inheritance tax on farms worth more than £1 million is a “fair approach”, with current relief on business and agricultural assets “heavily skewed towards the wealthiest estates”.
In the Commons, Ms Atkins said: “Growth flatlining, business confidence plummeting and job freezes – and who has Labour chosen to pay the price for their economic literacy? Pensioners, family businesses and farmers.”
She added: “Will the minister now commit to a full and proper review of this dreadful policy?”
Ms Atkins continued: “As worrying reports of suicides amongst farmers begin to emerge, will he please do as the Defra (Department for Environment Food and Rural Affairs) Secretary (Steve Reed) has failed to do, which is measure the number of suicides over the next 12 months so that we can understand the human cost of this policy?”
Responding to the urgent question on the Office for Budget Responsibility’s forecast on the costing of the policy change, Mr Murray said: “I think that one of the confusions on the benches opposite is to confuse the value of farms with the value of claims under inheritance tax.
“And the only way to truly understand the impact of changes to inheritance tax policy on inheritance tax claims is to look at the claims data itself.”
Earlier in the session, he had told MPs: “The Government is maintaining very significant levels of relief from inheritance tax beyond what is available to others.
“Under the current system, the benefit of the 100% relief on business and agricultural assets is heavily skewed towards the wealthiest estates. According to the latest data from HMRC, 40% of agricultural property relief benefits the top 7% of estates making claims.”
“This is a fair approach that protects farms whilst also fixing the public services we all rely on,” the minister added.
Conservative MP Jerome Mayhew said older farmers will have less time to plan their financial affairs as a result of the changes.
The Broadland and Fakenham MP said: “The OBR confirms that it is more difficult for older people to restructure their affairs quickly. So will the Government finally listen, show some humility and consult on how best to tackle the tax shelterers while still protecting our farmers?”
Mr Murray replied: “We’ve pointed to the fact that the way that we are reforming agricultural property relief and business property relief maintains generous exemptions from inheritance tax, with a £1 million full relief, the 50% relief beyond that, and of course, the existing nil-rate bands and exemptions that already exist within the system.”
Chi Onwurah, Labour MP for Newcastle upon Tyne Central and West, said: “We cannot help but be aware that most of that land is owned by, for example, the Duke of Northumberland or big landowners and those seeking to minimise their tax exposure.
“So does the minister agree with me that by keeping this loophole open for so long, the country has pushed up land prices and pushed out the next generation of young farmers?”
Mr Murray replied: “There certainly is evidence that the current system in relation to inheritance tax has caused people to use these reliefs as a way of tax planning, of avoiding inheritance tax bills.
“And I think the broader question is to do with the fairness of this measure and the sustainability and, as I mentioned in my earlier comments, 40% of agricultural property relief benefits the top 7% of estates; 50% of business property relief benefits the top 4% of estates.”
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